Supreme Court to rule on software patents

Several tech companies have told the nation's highest court that it should make a decision on software patent standards, and the court agrees.

Donna Tam
Donna Tam Staff Writer / News
Donna Tam covers Amazon and other fun stuff for CNET News. She is a San Francisco native who enjoys feasting, merrymaking, checking her Gmail and reading her Kindle.

The US Supreme Court has agreed to hear a case that will determine what computer software is eligible for patent protection, Reuters reported Friday.

Several tech companies, including Google, Hewlett-Packard, Facebook, and Netflix, have urged the court to take on this decision.

The case centers on a dispute between two companies over financial transaction software. Alice Corporation Pty Ltd. holds a patent for software that facilitates financial transactions. CLS Bank International is challenging the patent.

This will be an important case, particularly for tech companies that often use patents to wield lawsuits as a way to fight off competition. Patents protect the owner, giving them rights over certain computer processes and systems.

A lack of software patent standards has caused confusion in the past, leaving the Supreme Court to sidestep the issue previouslywithout providing any guidance on what types of software are eligible for patent protection.

Updated, 10:20 a.m. PT: Added background on software patents.